Why AI, Energy & Housing are the biggest themes for the rest of the year & are all Super funds really the same?

Tom Wickenden (0:00)

What's good for the US economy and the global economy is the ongoing capex cycle, predominantly driven by US hyperscalers. It seems very clear that the hyperscalers are still very keen and intent on spending money and even more money to the trillions next year, which is the biggest capex cycle in history.

Bryce Leske (0:18)

Welcome to another episode of Equity Mates, a podcast where we explore what's possible in the world of investing. If you've just joined us for the very first time, a huge welcome to our show. My name is Bryce.

Alec Renehan (0:28)

I'm Wren and today we're zooming out from the day-to-day news and taking a look at some of the big themes for the rest of the year. And then Super September continues as we bust another myth. Bryce, big episode today.

Bryce Leske (0:41)

Can't wait to get stuck into it, Wren. Before we do, FinFest is inching closer. Australia's largest finance festival, October 24th here in Sydney. And we want to shine a light on one of the sessions that you can expect on the day.

Alec Renehan (0:53)

Yeah, we have Ron Hodge and Effie Zahos from InvestSmart talking about building a portfolio, but they're not just going to talk about it, they're going to actually do it. They're going to build three portfolios from scratch for three different life stages, different personas. So if you're wondering what the right portfolio for you is, obviously that's personal, but they will be able to give you a general guide.

Bryce Leske (1:17)

Yeah, they'll give you a general sense of what to think about. I mean, it's just an example that FinFest is programmed to ensure that anyone, no matter where you are on your investing journey, there is going to be something there for you. So whether you're a beginner or you think you're up there with the likes of Bill Ackman and Warren Buffett, come and join us.

Alec Renehan (1:33)

Yeah, we should be clear. Bill Ackman is involved in FinFest, Warren Buffett isn't, but Bill Ackman, pretty big get. So go to equitymates.com/finfest to get your tickets. They're only 55 bucks. It's going to be an epic day. You're going to regret it if you miss it.

Bryce Leske (1:47)

FinFest is proudly brought to you by Betashares. Bit of a different news segment this morning, Ren. We're not going to be looking at the news here and now, but taking a look at some of the big themes that are going to play out for the rest of the year. And to do that, we have Tom Wickenden, an investment strategist from Betashares, joining us.

Alec Renehan (2:02)

Yeah, they've just published their half two outlook and we want to unpack some of the big themes. So let's get to our conversation with Tom.

Bryce Leske (2:09)

News and markets. Tom, welcome back to Equity Mates.

Tom Wickenden (2:13)

Great to be back on, guys.

Bryce Leske (2:14)

So we want to start with the biggest story in markets and get a sense of how you're seeing it play out in the second half of 2026 And that is the AI trade. So how do you see it as we get into the second half?

Tom Wickenden (2:26)

Yes, we've just done a bit of work on this in the team. We've got our paper Ships, Chips, and Red Bricks. And this is, of course, the chips section of the paper. There's a few layers, so we can unpack relatively at a relatively high level. At the very top end, what's good for the US economy and the global economy is the ongoing capex cycle, predominantly driven by US hyperscalers. And that's pretty important for global growth, US growth, and a lot of sectors, not just the technology sector.

At the moment, it seems very clear that the hyperscalers are still very keen and intent on spending money and even more money into the trillions next year, which is the biggest capex cycle in history. And the other question is, can they keep spending this much money? That narrative is evolving. In years gone by, they'll spend their own money, their own cash flows. Now we've shifted to more of that money coming from the bond market. So that adds a bit of a caveat. If you want to keep spending this money, well, you need bond investors to keep putting it into your bonds. So far, the answer has also been yes. Bond investors are happy to fund this to this point in time. We are seeing spreads get a little wider on those bonds, but no issues there. So the number one question, can and will the spending continue for the foreseeable future? The answer remains yes. Now, when we move a step down, we think about the actual profitability or the returns for the hyperscalers from that spending.